The countermeasures have been agreed to by EU member states as the United States has yet to provide the basis for a negotiated settlement, which would include an immediate removal of US tariffs on EU exports in the WTO Airbus case. The World Trade Organization (WTO) formally authorized the EU on October 26 to take such countermeasures against illegal US subsidies to aircraft maker Boeing. The measures will take effect from tomorrow.

The European Commission is ready to work with the US to resolve this dispute. and also to agree on long-term disciplines on aircraft subsidies.

Executive Vice President for an Economy that Works for People and Trade Commissioner Valdis Dombrovskis said: “We have made it clear all along that we want to solve this long-standing problem. Unfortunately, due to the lack of progress in the talks with the United States, we had no choice but to impose these countermeasures. In consecuense, the EU is exercising its legal rights under the recent WTO decision. We call on the US to accept that both parties abandon existing countermeasures with immediate effect, so that we can quickly put this behind us. The removal of these tariffs is win-win for both parties, especially with the pandemic that is wreaking havoc on our economies. We now have the opportunity to restart our transatlantic cooperation and work together towards our shared goals.

The countermeasures place the EU on an equal footing with the US, with sizable tariffs on either side based on two WTO decisions related to aircraft subsidies. They include additional duties of 15% on aircraft, as well as 25% additional tariffs on a variety of agricultural and industrial products imported from the US., Which strictly reflects the countermeasures imposed by the United States in the context of the WTO case on subsidies to Aerobús.

Background

In March 2019, the Appellate Body, the highest level of the WTO, confirmed that the United States had not taken appropriate steps to comply with WTO rules on subsidies, despite previous rulings. Instead, it continued its illegal support for its aircraft maker Boeing to the detriment of Airbus, the European aerospace industry and its many workers. In its ruling, the Appellate Body:

• confirmed that the Washington state tax program continues to be a core part of Boeing's illegal subsidy in the United States
• found that a number of ongoing instruments, including certain procurement contracts from NASA and the US Department of Defense, constitute subsidies that may cause financial harm to Airbus
• confirmed that Boeing continues to benefit from an illegal US tax concession supporting exports (Foreign Sales Corporation and Offshore Revenue Exclusion).

Today's decision confirming the EU's right to retaliate follows directly from that previous decision.

In a parallel Airbus case, the WTO allowed the United States in October 2019 to take countermeasures against European exports worth up to $ 7.500 billion. This award was based on a 2018 Appellate Body decision that found that the EU and its member States had not fully complied with previous WTO rulings regarding Reimbursable Launch Investment for the A350 and A380 programs. The United States imposed these additional tariffs on October 18, 2019. Meanwhile, the affected EU member states have taken all necessary steps to ensure full compliance.